Hi everyone. Good morning and thanks for joining us at the H.C. Wainwright 27th Annual Global Investment Conference. My name is Emily Bodner, and I'm an Equity Research Analyst at H.C. Wainwright. I'm pleased to introduce the team from Arcus Biosciences. We have Jennifer Jarrett, the Chief Operating Officer, Richard Marcus, Chief Commercial Officer, and Peter Eaves, Chief Financial Officer.
Just to make sure.
Peter Eaves, Head of Investor Relations. Maybe to start, for those who are less familiar with the story, can you walk us through some of your key pipeline programs and recent progress?
Sure. Arcus is a very unique biotech company today in that we have three different programs and five phase 3 studies. The reason that we've been able to do that is that we've received a lot of financing from our partners, specifically Gilead, AstraZeneca, and Taiho. That's what's enabled us to pursue this many programs in parallel in the clinic. The program that's getting the most attention right now is castatinopathy. This is our HIF2α inhibitor. There's one HIF2α inhibitor that's been approved today, so the mechanism has been validated. That is Merck's belzutifan. It is on the market today only in late-line clear cell RCC. We've now presented data for castatinopathy, which is a next-generation HIF2α inhibitor, at three different medical meetings. In two of those meetings, we presented data from our monotherapy cohorts.
In another medical meeting, which was at ASCO, we presented initial data for our cast plus cabo cohort, which is the same combination, same setting that we're evaluating in our first phase 3 study, PEAK1. We have another presentation coming up in October. This will be the fourth data release in about a year. This will be for the four cast monotherapy cohorts, all in late-line clear cell RCC. To date, we've reported ORR from those cohorts. We've only reported PFS from one of those cohorts. At the next meeting, it will be the first time that we'll be disclosing PFS and showing the Kaplan-Meier curve for the other cohorts. We're excited about that presentation. We have just started our first phase 3 study for castatinopathy. That is PEAK1. In that study, we'll be evaluating cast plus cabo versus cabo alone in IO-experienced clear cell RCC.
That's at least a $2 billion market in the G7 markets alone, a massive market opportunity. In that study, we're going right on top of the standard of care in that setting, which is cabo, a very clean study design. We've also started what could be our next phase 3 program, which is called Evolve. That is a phase 1b/3 study that we're doing in collaboration with AstraZeneca. They're actually operationalizing the study. That's evaluating cast plus volrue, which is their anti-PD-1/CTLA-4 bispecific in first-line clear cell RCC, which is a massive market. We think at least $3 billion in the major markets. We're very lucky to be working with the company AstraZeneca on that study. It allows us to save a lot of resources to be working with a world-class oncology partner. That study is now up and running.
That's the phase 1b portion of that study, and the goal is to start the phase 3 portion by the middle of next year or so. We're very, very well capitalized today with about $900 million of cash as of the last quarter. We're in a great position to continue prosecuting all of these programs.
Great. Maybe taking a bit of a step back on castatinopathy, which obviously, as you mentioned, targets HIF2α similar to the approved belzutifan. What are some of the key differences in construct with castatinopathy compared to belzutifan?
Right. First of all, castatinopathy, like belzutifan, is a small molecule. Unlike antibodies, which tend to be very, very similar from antibody to antibody, small molecules tend to have many more differences. The primary difference for castatinopathy versus belzutifan is its PK/PD profile. From a PD perspective, if you look at the primary biomarker that's used to measure activity against HIF2α, which is EPO, we achieve the same level of suppression of that biomarker at 20 mg of castatinopathy that belzutifan does at 120 mg, which is their approved dose. We are taking forward our 100 mg dose of castatinopathy, so five times that PD equivalent dose of 20 mg. As a result, we believe that we're hitting the target significantly harder than belzutifan is.
We think that's why we're seeing the efficacy data that we are, which is showing clear differentiation relative to belzutifan on every efficacy measure that we've reported so far. Also, from a PK perspective, you might ask, why doesn't Merck just dose up belzutifan? They have dose absorption-limited pharmacokinetics. If they dose the drug higher than 120 mg of belzutifan that's approved, they don't get any higher drug exposure, which is probably why they went with that 120 mg dose. Like I said, we think that we have a very different PK/PD profile. That's now playing out in the efficacy data that we've been seeing.
Yeah. Maybe going a bit further into that, you've obviously announced your phase one data, including the monotherapy arm where you've shown response rates of about 30% and median PFS of close to 10 months or more in some of your other cohorts. How does that compare to belzutifan more specifically in other trials in late line renal cell carcinoma?
Yeah, maybe I'll take that one. I'm quite happy with the data we've shown to date. Like you said, our castatinopathy monotherapy data had a confirmed response rate of 31%. In fact, we've had four different cohorts on the monotherapy, so about 120 patients overall, very consistently showing a higher response rate compared to the belzutifan earlier data from LIGHTSPARK-5, for example, that showed a 22% response rate. We're in the low 30s compared to their 22%, but probably as important is PFS, which is actually going to be ultimately the approvable endpoint for us. They showed in their study a 5.6-month PFS. In our first cohort, we had a 9.7-month PFS. Obviously, the other cohorts are also getting more mature and beyond that. We think we'll be consistently across our monotherapy cohorts greater than that, which was shown for belzutifan.
Great. Can you discuss the rationale for combining castatinopathy with TKI inhibitors, particularly cabozantinib, which you're evaluating in the PEAK1 trial? How do these two targets kind of go together?
Yeah, no, happy to. I think everyone probably knows that the TKIs are the dominant treatment in the second line for renal cell and actually can be used in first. It really is the main set of treatments for the second line. There are multiple TKIs approved. Talking with the physicians about which TKI, it was very clear that cabo is the preferred TKI in that second line. It probably goes along with the fact that it has a 30% or so market share in that position. We are going to combine castatinopathy with the most commonly used TKI in that setting, which is cabo. The physicians are very comfortable with cabo, its efficacy profile, and its safety profile. Importantly, also, we do not think there is really any overlap of the safety characteristics of castatinopathy with that of cabo. They can be used together without having additive toxicities.
Could you share the design of the PEAK1 Phase 3 trial and also how that compares to Merck's strategy in the similar setting with their LIGHTSPARK-11 trial?
Yes, the PEAK1 study is very similar to what we have done in our Phase 1 study combining castatinopathy and cabozantinib. Very much the same treatment population as we showed some early data at ASCO a couple of months ago. That study is castatinopathy plus cabozantinib against cabozantinib. It is a randomized placebo-controlled trial. It will be looking at PFS as the primary endpoint. That's the sole primary endpoint. We aren't splitting it with overall survival. Progression-free survival is the primary endpoint. Of course, we will have overall survival as a key secondary endpoint as well.
Yeah. Is there any potential challenges with the FDA without having OS, given that Merck is looking at both?
The short answer is no. We don't see any challenge with that. We've engaged the FDA. We understand exactly what the requirements are going to be. PFS, in fact, really is the consistently or commonly used endpoint for clear cell renal cell carcinoma in this setting. We don't think there's any challenge to come with that. We do have OS being collected appropriately and consistently. It's a pre-specified key secondary endpoint. We will have all the data necessary for the health authorities.
Richard, maybe worth highlighting the key difference between PEAK1 and LIGHTSPARK-5, which is Merck's competitive study.
Yeah, so happy to also comment on their design, which is they're combining lenvatinib plus belzutifan in there for their investigational arm, but comparing to cabozantinib. I think a risk, if you will, for their study design, the way I look at it, is they have a different TKI in their control arm, which, of course, not all TKIs are actually equivalent. I think that's a big risk to their design, having cabozantinib in the control arm, but lenvatinib in the investigational arm. Also, as you mentioned, they are splitting their statistics between PFS and OS as opposed to what we've done, which is putting all our statistical power on the PFS endpoint.
Yeah. Maybe discuss the efficacy profile of cabozantinib alone, what that looks like in the second line setting, kind of how you're expecting the control arm in PEAK1 to perform. Maybe touch on the cabozantinib data that you presented earlier this year.
Yeah. If you look at previous studies from cabo, there are really three main studies that we focus on: METEOR, CANTATA, and then the CONTACT-03. The PFSs from this study range from about 7.5 to 10 months. That is about what we would expect to see in the control arm of our study. The data that we presented at ASCO was from about 24 patients who received castatinopathy plus cabo, 100 mg castatinopathy, 60 mg cabo. There we showed a 46% confirmed response rate, so great response rate. If you look at the waterfall chart, almost every single patient in that study derived some clinical benefit. PFS was very, very immature, but I think we were starting to see some early signs of durability if you look at the spider plots that we showed. We are very optimistic about what the PFS could look like there.
What's also important about that study is that the safety profile for the combination looked very good, particularly when you're combining two anti-cancer drugs. The reason sometimes combining two anti-cancer drugs can work against you is you see more overlapping toxicities than you would expect. You have to take patients off of one drug or both drugs, and that really works against the experimental arm. We were very pleased to see that there was so little overlapping toxicity. Really, the only overlapping toxicity that we're seeing is fatigue. No patient in that study discontinued both treatments. We only had two patients of the 24 that discontinued any treatment. What's important about that is that at all points in time, a patient was receiving at least one therapy. That is obviously going to help from a PFS perspective.
Just as a benchmark for what we've seen in a previous study that evaluated belzutifan plus cabo, the ORR from that study was 31%. That compares to the 46% that we saw at this early look in our 24.
Maybe talking about LIGHTSPARK-3 a bit more. They had a median PFS of over 13 months. Given that you're already seeing higher response rates, are you expecting to also see a higher median PFS?
Yeah, we'll see what the data shows. We're still nowhere close to a median PFS, which is obviously a good thing. We'll see what the data shows. We think 13+ months is a great place to be in a second line metastatic solid tumor setting. We're watching our data mature, and we'll be excited to show it at some point next year.
Yeah. In terms of enrollment speed for PEAK1, what are you kind of expecting based on what we've seen in other trials in that area?
Yeah. If you look at precedent, both first line and second line RCC studies, the majority of them have enrolled in 18 months or less. In fact, there's a few data points where studies have enrolled as quickly as 10 months. The primary reason for that is there's just not a lot of competition in RCC. It's very different than lung cancer and prostate cancer and some of these other tumor types where there's a lot more competition out there. I think there's a few different tailwinds that will really help us with this study. First of all, there's no directly competing studies at this time in the IO experienced clear cell RCC setting as far as large RCC studies. The second thing is that we are going right on top of the standard of care. That helps a lot.
Patients aren't giving up on something by being in our study. They're either getting cabozantinib with castatinopathy in the experimental arm or castatinopathy in the control arm. The other thing that really helps us is that outside of the U.S., belzutifan is pretty difficult to access today. It's still not paid for in Europe as well as most countries outside of the U.S. For patients that want to get a HIF2α inhibitor, which is a lot of patients now because there's a lot of excitement around the class, they have to participate in a clinical study. There's a huge amount of excitement for this study in the U.S., but we're seeing a huge amount of excitement outside the U.S. just because clinicians are so excited to get their hands on a HIF2α inhibitor, particularly castatinopathy.
Great. You spoke about how you'll have additional monotherapy data later this year. You have in total four cohorts, about 120 patients. Maybe walk us through what we should be expecting to see. Is it just kind of reaffirming the data you've already shown? You also have the higher cohort of 150. Any differences we should be expecting from that?
Yeah. These data will, I think, reaffirm what we've shown that we have a better ORR and longer PFS and lower rate of primary progressive disease relative to belzutifan for every cohort. The really new disclosure is going to be on the PFS side just because at the last presentation in ASCO GU, we only had a mature PFS for one cohort, which is the first cohort to complete enrollment, which was the 50-mg BID cohort. We now have a lot more follow-up, so eight months more follow-up for all of these cohorts at this next look. Obviously, this is a more mature data set. We will either be showing median PFSs for the other cohorts or we will show a Kaplan-Meier curve if we have not hit a median yet. You know, it's great to have this much follow-up since the last presentation.
It will be a very meaningful data set just as far as the number of patients that are at 120. You know, you're getting close to what a phase 3 arm could look like and just the amount of data that's going to be coming out of that large data set.
Okay. Maybe going into the first line trial that you're running with AstraZeneca's anti-PD-1/CTLA-4 bispecific antibody, maybe just touch on what their bispecific has shown in the first line setting relative to IpiNevo, which is approved, and also the terms of the partnership.
IpiNevo, first of all, is the most widely used regimen in that frontline setting. What AstraZeneca has is a bispecific that combines anti-PD-1 plus CTLA-4, the two mechanisms that are in the IpiNevo combo. We think that this bispecific could have the same safety profile as IpiNevo, but potentially better efficacy. We're really excited about combining with volrue. AstraZeneca has made a very, very big investment in this molecule. One of the reasons why clinicians like using IpiNevo in the frontline is that, one, it's TKI-free. TKIs have a lot of toxicities. Patients are going to receive a TKI during the course of their treatment at some point in time if they fail frontline. Clinicians really love the idea of saving patients from the harsh toxicities of TKIs in the frontline. The second thing is that IpiNevo gives patients the best chance at long-term survival.
The PFS is a little bit shorter than what you expect with anti-PD-1 plus TKI, which is the other standard of care in that setting. The OS is longer, and there's a really, really nice tail end. You can see there's patients that derive really, really long-term benefit from IpiNevo. That's what got AstraZeneca and us so excited about combining castatinopathy with volrue. Interestingly, also, Merck is not evaluating that combination. They're combining belzutifan with anti-PD-1 plus TKI. They still have TKI in their frontline combination. We think this can be the only TKI-free HIF2α inhibitor combination being developed in that frontline setting. As far as what that partnership looks like, as I mentioned earlier, AstraZeneca is operationalizing the study. This is very different. Sometimes you'll read about these clinical supply agreements, which basically means another company is just giving the biotech drug to use in their clinical study.
In this case, AstraZeneca is actually running the study, and they are paying for 50% of the study cost. This is a hugely resource and cost-efficient way for us to pursue the frontline setting. Like I said earlier, with the world-class oncology partner that is really, really excited about this combination. It's also set up as a phase 1b/3 study, as I mentioned earlier. The phase 1b portion is essentially like a safety run-in. The idea is to demonstrate that volrue can be safely combined with castatinopathy. Once we've shown that, we'll open up the phase 3 portion as quickly as we can. It's much quicker than running a phase 1b, stopping and looking at the data, and then initiating a phase 3 from scratch. The idea is to try to get that phase 3 portion going as quickly as we can.
Should we be expecting any data update from the phase 1b, or are we going to have to wait until after the phase 3?
The guidance that AstraZeneca has provided and we've provided is to provide data in the second half of next year.
Okay. Maybe just discuss more broadly how you think about the market opportunity of castatinopathy across all these different lines, given obviously you have many different regimens ongoing.
Yeah. RCC today is almost a $10 billion market just in the major markets. That's excluding places like South America, China, India, et cetera, that would obviously be additive. It's also expected to grow to $13 billion just within the next few years. A large driver of that growth is actually the introduction of the HIF2α inhibitor class, especially given that HIF2α inhibitors are expected to drive longer time on treatment. That just obviously expands the revenue opportunity. For the second line indication, we've shown that we think that can be at least a $2 billion market and maybe even longer or larger depending on what we ultimately see as far as time on treatment. The frontline opportunity for us is at least $3 billion. Again, these are just in the major markets. These are both targeting very, very big market opportunities.
The other thing that we're really excited about is in the HIF2α inhibitor class. It is just us with castatinopathy and then Merck's belzutifan. That is it. It is a two-horse race, which is completely different than most cancer markets today, as you know, Emily, where there's like multiple.